This presentation by Avantika CHOWDHURY, Partner, Oxera, was made during the discussion “E-commerce and Competition” held at the 129th meeting of the OECD Competition Committee on 6 June 2018. More papers and presentations on the topic can be found out at oe.cd/2gv.

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© Oxera, 2018.
Unilateral conduct
and regulatory tools
OECD Roundtable: Implications
of E-commerce for Competition
Policy
Avantika Chowdhury
6 June 2018, Paris

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Multi-sided platforms
Increased importance with growth of e-commerce
2
Merchants/
retailers
Consumers
No capacity constraint online to limit
network effects

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Risk of harmful unilateral conduct by platforms
3
• potential concerns:
• exclusion of rivals: refusal to deal, discrimination, favouring own business,
demotion of rivals, margin squeeze, predation, bundling, MFNs, exclusivity
• exploitation (trading partners): unfair terms
• exploitation (consumers): personalised pricing, unfair terms
• risk depends on market power: network effects can strengthen market power, but can
also facilitate new (innovative) entry
• ‘winner-takes-all’ or ‘competition one-click-away’? E.g. Myspace
• multi-homing as constraint
• downward spiral fuelled by network effects

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Varying effects on consumer outcomes
4
Likelihood
of
efficiency
benefits to
consumers
Closeness to consumers
Bundling (Google
vs Streetmap)
Delisting
rivals
(Google
scraping FTC
2013)
Foreclosure of
other platforms
through exclusive
deals (Onlinepizza
Sweden)
Exploitative
terms to/margin
squeeze of postal
operators by
Amazon?
Unfair terms to merchants by
marketplace
‘Walled gardens’
in online
advertising?
Favouring own
business (Google
Shopping EC,
FTC)

5. Google cases: the debate on consumer harm
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Google is
dominant in the
search engine
market
Distorted
effect on traffic
Abuse of
dominance in
the CSS
market
1
GS is more
visible than its
rivals
July 2017
• Visibility drives traffic
• Rival CSSs suffer from
decreased traffic and it
reduces innovation
• thus consumers are
harmed
• Consumers not locked-in; can visit
other CSSs/ merchant platforms
directly (growth of eBay, Amazon)
• Consumers not necessarily
harmed: need to assess pro- and
anti-competitive effects
US FTC 2013 decision: closed investigation
• Changes to Google’s algorithms result in search bias and might harm competitors
• However, there is no evidence of consumers’ harm as Google’s product
innovation and users’ experience improvements might compensate.
Google is
dominant in the
search engine
market
1
Streetmap vs Google UK High Court judgment: no abuse
• Streetmap had a ‘dramatic loss of traffic’ following the launch of Google map
service at the top of its search results page in 2007.
• The introduction of Google maps improve Google’s offering and strengthening its
position on the map market is objectively justified
2

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The centrality of data
Use and provision of data by platforms
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• data is both a cause for concern and a source of
potential benefits
• in search (better search results but debate re
replicability without access), advertising
(targeted ads but lack of transparency for
advertisers), retailing (better product
recommendations but personalised pricing)
• additional concerns of privacy
• how does data affect competition and consumer
outcomes? depends on specific case and two
key characteristics of data
• cost of data acquisition: social graph versus
personal details
• depreciation rate: long-term personality traits
versus message content (hotel booking versus
Rolex watch)

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Online advertising market
7
• are there benefits of ‘walled gardens’ or a level of vertical integration in this market?
Should Google and Facebook provide consumer data to other advertising platforms and
to advertisers?
• impact on platform competition? varying degrees of necessity of data; social
graph and purchasing history may be hard to acquire and therefore provision may
increase competition
• impact on advertisers? More choice and possibly lower advertisement costs; better
understanding of return on investment (RoI)
• impact on consumers? Less privacy; more targeted ads and hence time saving
(however, doubts over impact of online advertising); lower prices from lower
advertisement costs? More personalised pricing?
• impact on consumers ambiguous
• is competition law best placed to tackle concerns? Possibly not
• other tools well suited in this, and many ecommerce settings: privacy laws, consumer
protection, regulation (e.g. Commission’s P2B proposals)